* Power producer makes announcement near deadline
* Dynegy had shopped unit’s prepackaged bankruptcy
Nov 3 (Reuters) - Independent power producer Dynegy Inc announced on Thursday the termination of offers to exchange up to $1.25 billion principal amount of outstanding notes of a subsidiary that may be facing bankruptcy.
The company had offered bondholders $1.25 billion of cash and new secured notes for outstanding bonds, but that offer has failed to garner much support and the deadline was Thursday at midnight.
In a press release, Dynegy Inc made the announcement terminating the exchange offers in its Dynegy Holdings unit.
“Beyond that, I don’t have any comment,” spokeswoman Katy Sullivan said when reached by telephone.
Last week, sources said that the debt-laden Dynegy Inc has been discussing with bondholders a plan to put the subsidiary into bankruptcy after bondholders shunned the $1.25 billion refinancing.
The company has been struggling with a mountain of debt and its power business has been squeezed by rock-bottom natural gas prices.
The proposed bankruptcy would not affect parent company Dynegy Inc, whose shareholders include billionaire investor Carl Icahn and investment firm Seneca Capital.